After debates, the Parliament finally changes the scope of payments for mineral resources
Mongolia • Issue 01/2020 • February 2020
The Parliament approves amendments to the Minerals Law with respect to royalties on usage of minerals resources.
On 26 March 2019, the Parliament amended (the “Amendment”) Minerals Law*. The Amendment focused on the Article 47 of the Minerals Law and made changes in relation to royalties on usage of minerals resources (the “Royalty”) applied on selling, transporting for selling or using minerals. The Amendment also expanded the scope of entities who are subject to paying the Royalty by including not only mineral license holders, but also entities who engage in the aforementioned activities as well as entities who sell/deposit gold to the Central Bank of Mongolia. Prior to the Amendment, the Royalty applied to mineral license holders only.
On 28 June 2019, the Constitutional Court reviewed the Amendment as per a claim that “the Amendment did not conform to concepts and principles under the Constitution of Mongolia as it causes economical pressure and curtails normal conduct of business in Mongolia by imposing double taxation.”
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